Bone marrow-derived mesenchymal stem cells (MSCs) can serve as a vehicle for gene therapy. Angiopoietin-1 (Ang1) is a critical factor for endothelial survival and vascular stabilization via the inhibition of endothelial permeability and leukocyte-endothelium interactions. We hypothesized that MSC-based Ang1 gene therapy might be a potential therapeutic approach for lipopolysaccharide (LPS)-induced lung injury. MSCs were isolated from 6 week-old inbred male mice and transduced with the Ang1 gene, using a lentivirus vector. The MSCs showed no significant phenotypic changes after transduction. In the in vivo mouse model, the LPS-induced lung injury was markedly alleviated in the group treated with MSCs carrying Ang1 (MSCs-Ang1), compared with groups treated with MSCs or Ang1 alone. The expression of Ang1 protein in the recipient lungs was increased after MSCs-Ang1 administration. The histopathological and biochemical indices of LPS-induced lung injury were improved after MSCs-based Ang1 gene treatment. MSCs-Ang1 administration also reduced pulmonary vascular endothelial permeability and the recruitment of inflammatory cells into the lung. Cells of MSC origin could be detected in the recipient lungs for 2 weeks after injection with MSCs. These results suggest that MSCs and Ang1 have a synergistic role in the treatment of LPS-induced lung injury. MSC-based Ang1 gene therapy may be developed as a potential novel strategy for the treatment of acute lung injury.